HURRICANE IKE UPDATE: TWO MANDAMUS PROCEEDINGS FILED IN TEXAS SUPREME COURT FOR REVIEW OF HARRIS COUNTY DISTRICT COURT’S FAILURE TO ABATE LITIGATION PENDING COMPLETION OF THE APPRAISAL PROCESS

Last week, Cypress Texas Lloyds filed two mandamus proceedings requesting the Texas Supreme Court to determine whether Judge Mike Miller of the 11th  District Court in Harris County (the Ike Discovery Judge) abused his discretion by failing to abate Hurricane Ike litigation pending completion of appraisal. The Texas Supreme Court has called for responses to both petitions for review.  In Knight v. Cypress Texas Lloyds, No. 2009-33364, and Shepard v. Cypress Texas Lloyds, No. 2010-41195, Judge Mike Miller granted Cypress Texas's motions to compel appraisal, but declined to abate the cases during the appraisal process even though abatement was contractually required pursuant to the parties' insurance policies.  The Fourteenth Court of Appeals denied Cypress Texas's petitions for writ of mandamus, precipitating the instant mandamus filings in the Texas Supreme Court.  Cypress Texas is also party to three other mandamus proceedings pending in the First Court of Appeals on the same issue.

In its petitions for writ of mandamus, Cypress Texas highlighted the importance of abating a case during appraisal, stating that it is a recurring issue for many insurance carriers and warrants resolution by the Texas Supreme Court.  In support of its requests for the Court’s review, Cypress Texas argues that the insureds deprived Cypress Texas of its bargained-for contractual right to have an appraisal, an alternative dispute resolution mechanism, before engaging in the expense of litigation. The only remedy available to cure the fact that the insureds brought suit before appraisal is abatement of the litigation until the appraisal is completed; however, the trial court denied Cypress Texas of that remedy.  Additionally, Cypress Texas argues that it will suffer irreparable harm if the contract is not honored as written since it will incur extensive costs if the litigation is permitted to continue while appraisal goes forward.

Cypress Texas is represented on appeal by Warren W. Harris of Bracewell & Giuliani LLP and by Thomas M. Fountain of Fountain & Associates.   The Mostyn Law Firm represents Plaintiffs in both underlying state court actions.

Editor’s Note: Cypress Texas Lloyds requests that any other carrier with an interest in these important appraisal issues to join it through amicus briefing to the Texas Supreme Court.  For a copy of the mandamus pleadings filed by Cypress Texas Lloyds, or to discuss the amicus options available, please contact Chris Martin of our firm at martin@mdjwlaw.com or at 713-632-1701.